Simon-Kucher & Partners charts course for a successful future

While key powerhouse markets of Germany, France and the UK still drive the firm’s steep growth trajectory, Simon-Kucher & Partners’ Dutch office saw revenues rocket by over 25% last year. Netherlands Managing Partner Onno Oldeman and Senior Director Arjen Brasz sat with Consultancy.eu to explore what sets Simon-Kucher apart in a crowded consulting market, and how the firm plans to maintain that explosive momentum in the future.

One year after breaking the 1,000 employee barrier, Simon-Kucher & Partners reached another major milestone: a turnover of more than €250 million. Since the announcement earlier this year, the management consultancy has however revealed that its meteoric rise is a long way from ending just yet. In the first half of 2018, the consultancy has booked 19% higher revenue when compared to the same period in 2017, suggesting it could be on track for a sixth record-breaking year in a row.

While Simon-Kucher is keen to forge ahead with an international push in the world’s largest consulting markets, in order to challenge the size of larger peers such as A.T. Kearney, Roland Berger and Strategy&, it is also performing exceedingly well in smaller markets. Most notably, Simon-Kucher’s office in the Netherlands saw booms to both income and headcount last year. Buoyed by a 28% expansion in revenues, its workforce rose by 26% in just six months. Commenting at the time, Onno Oldeman – the Managing Partner of Simon-Kucher in the Netherlands and a member of the firm’s global Board – said these positive developments would continue for the foreseeable future, stating; "As long as our order book grows, we will continue to look for talent to enable this growth. Both starters and more experienced profiles.”

Several months later, little seems to have changed for Oldeman. The former Customer & Market Strategy service line leader at Deloitte Consulting joined Simon-Kucher in 2008 to found its Dutch wing, and he told Consultancy.eu that the firm’s continuous growth, both outside and inside the Netherlands, has been continuous throughout his 10-year-tenure with the consulting firm.

“In my time with Simon-Kucher, we have jumped from 400 to 1,300 professionals,” he explained. “Starting during the financial crisis was the perfect time for us. We kick-started in an arena which was relatively untapped in the Netherlands and operating on a front without a lot of competition obviously helped, as we were able to market ourselves in an unsaturated market. I had been looking into launching a consultancy based on pricing previously, but certain cultural barriers had put this on the backburner. Then I met with Simon Kucher’s founder [Hermann Simon], spoke with him about it, and something clicked. We made a plan, and launched in the Netherlands.”

Similarly, Arjen Brasz has been in for the long-haul at Simon-Kucher. Now a Senior Director in the firm’s Amsterdam office, Brasz arrived straight from university in 2010. In that time, he feels he has come to see just why the firm has proven so successful. He said, “I’ve been with Simon-Kucher for eight years now. What I love about the firm is that, while every consulting firm aims at fostering a high level of personal motivation, at Simon-Kucher that is combined with the human touch, and with an attitude which encourages entrepreneurialism. The goal is to create a firm of mini-CEOs and effective teams. What I like about that is that this gives everyone a sense of responsibility.”

This has proven to be something of an x-factor when it comes to the firm’s current growth train, and according to the duo, this sees the global firm growing at 19%, behind an impressive rate of 32% in the Netherlands. Despite this popularity, Oldeman added, “There’s more room to leverage your personal blend of skills and beliefs here than at a larger consultancy with a rigid hierarchy. That almost goes without saying; it’s one of the advantages of still being relatively small.”

Adapting to change

Thanks to the firm’s comparative size, Simon-Kucher as an organisation is still able to maintain a relatively common sense based mode of operations, according to Brasz and Oldeman. There are not “too many rules”, while the company’s meritocratic structure has helped to boost growth. At the same time, each new office has a local flavour to help it hit the ground running in a new market, positioning local leadership well to adapt to change on multiple fronts.

Simon-Kucher & Partners specialises in three main service offerings: commercial strategy, sales, marketing and pricing. Oldeman expanded; “We focus on the sunny-side of consulting”, adding, “our consultants are specialised in helping clients achieve top-line growth.” However, the consultancy’s service portfolio has evolved over the past decade – “Pricing used to make up 80% of what we do. Now it’s still 50%, in terms of Simon-Kucher’s global business, as we accommodate a wider commercial strategy-orientated view towards it. That’s because pricing is so broad, it touches everything!”

Illustrating just why firms seek consulting support on this front, Brasz pointed to an example at a fast-growing software firm. “As scale-ups transition through growth periods, in order to cope with new demands and get the most from their products, they have to transform their pricing strategy and embrace new pricing models.” Elsewhere, Brasz highlights two well-known examples. “In the aviation industry, algorithms of airlines are so complex; it can sometimes mean there are 20 variables at play at once in the pricing of a ticket. Meanwhile, in retail, dynamic pricing models incorporating elements such as demand, supply, promotions and competition are becoming key differentiators for gaining premium margins.”

“We focus on the sunny-side of consulting, helping our clients with commercial strategy, sales, marketing and pricing.”
_{– Onno Oldeman, Global Board Member}

For a large fitness player in the Netherlands, Brasz says that pricing, including smart pricing aligned with capacity optimisation and packaging, has proven instrumental in helping its client stand out from the crowd. When delving into such analysis, Simon-Kucher commonly conducts consumer research, bringing in out-of-the-box skills such as marketing research, consumer behaviour and neuromarketing into its traditional consulting skillset.

Demonstrating the impact of the work provided to clients has been a fundamental factor in Simon-Kucher’s success, too. As pricing is so closely linked to the revenue or profit margin of a firm, pricing engagements can be seen to have much more tangible benefits than other aspects of the consulting industry. “Our business case is inherently tied to revenue performance, as well as KPI’s such as conversion, churn, etc.” Thanks to this visibility of impact, coupled with the firm’s delivery, the pair contends that the firm enjoys “60% recurring revenues”. Clients often want continued support, or if someone moves on from a client to a new firm they will recommend Simon-Kucher on the basis of those results. Brasz added that as a result, a popular saying in the Amsterdam office has become, “Quality and client success sells.”

One example where consultant value was more apparent than ever was in a commercial due diligence engagement for a private equity firm. Having taken the target company’s business model under scrutiny, Simon-Kucher’s team managed to bring down the price by millions in lieu of the valuation put forward by M&A experts at the other side of the table. “Extremely gratifying,” recalls Brasz.

Challenges

With over 25 offices globally, the firm features a broad geographical footprint. When it was put to them that this could thin out a company, leaving it at risk in a struggling market, the pair both stated they believe Simon-Kucher has a history of succeeding in adverse markets, and its laissez-faire approach to top-down steering has made it agile enough to take advantage of new market spaces to weather such storms.

With regards to practicing this philosophy in the present, Oldeman remains particularly unmoved by the potential economic storm currently thrown up by Brexit. Thanks to its proximity with the UK, the Netherlands is one of the largest trading partners of Britain, placing traders in a relatively vulnerable position compared to the wider union. In line with this, Simon-Kucher Netherlands has close ties with its UK counterpart (around half of the office’s work is in tandem with foreign colleagues), but, as with the financial crisis of 2008, Oldeman contends that this presents opportunities for the firm, as clients weigh up how best to strategise pricing when faced with changing trade agreements.

“Largely our function at the moment on both sides of the channel is still reducing panic. We usually tell clients that, as things stand, nobody can predict what Brexit holds. At the same time, they can make good choices to prepare for what is to come, in terms of setting price and operationally hedging risks. He added that against a backdrop of growing import costs, in the UK, pricing trade-offs tend to “always be about rises.”

“Simon-Kucher combines high-impact projects with the human touch, and with an attitude which encourages entrepreneurialism.”
_{– Arjen Brasz, Senior Director}

Digital monetisation is another key topic for the firm moving forward. While it has presented a key opportunity for growth now, it also represents a major revenue line in the future. To that end, Brasz says, “Digital monetisation is more than a buzzword. It will help us grow, but will remain forever, as clients will continue to need to adapt and innovate their systems in an agile market. When they are left thinking ‘what does it bring to us, or what can it bring to us?’ that’s where Simon-Kucher comes in.”

New growth

As the firm prepares for further growth of its Dutch wing stimulated by these new market challenges, a decade after launching the Managing Partner reveals that his team is mulling over a third office upgrade. The firm has already had to relocate twice in Amsterdam Zuidas, the city’s business district, to accommodate the growing headcount. Its current location has a physical capacity of 50 employees, but Oldeman believes Simon-Kucher’s total market capacity in the Netherlands is likely to be around 100-150 staff.

How will the firm keep this entrepreneurial spirit alive if it does reach the size of the market’s largest firms, then? According to the pair, while the management consultancy is not presently facing the challenge of over-stretching, Simon-Kucher is taking pragmatic steps when it comes to avoiding it. This includes involving recruits deep in the firm from an early stage, to foster that sense of ownership, responsibility and entrepreneurialism. At the same time, supporting the development of core expertise, and building a team around a product which it can believe in will maintain a path to further growth. From an international perspective, meanwhile, Simon-Kucher hosts international training in Boston, US. According to Oldeman, this sees many professionals at the firm become “bonded for life”, with groups of those who go through the event together often jetting across the world to meet up with their former class-mates every year or so.

Interestingly, unlike many other consultancies, which seek to pump up their organic growth rates with acquisitions programmes, Simon-Kucher is yet to commit to a major purchase of another firm. Oldeman explained that the firm is finely balanced, and believes that it is best served by the current model, rather than having to integrate a new bolt-on which might come with a contradictory culture. The consulting industry has over the years seen a range of poor integrations unfold, in particular in the top segment, with Oldeman explaining that the firm firmly believes in growth from within.

He says, “We believe we have a unique drive for growth with our people, our Partners. By developing the Partners, we grow the firm. When people become Partners here, they take up global equity in the firm, something entirely unique to Simon-Kucher.”